You've never lost track of someone in a crowd? Narratively you are in a fight so it's not like you are just looking right at the elf. One moment he's there the next moment you lost track of him as your eyes drifted to another enemy, some motion you picked up out of the corner of your eyes etc. the bigger narrative problem IMO is explaining how everyone else is always seen and no one ever looses track of people in a crowd and no one can ever not pick up a tail. So how do you explain that once you see someone until the person is completely obscured you always keep perfect track of them? Everyone should be able to hide when lightly obscured after being seen though depending on how lightly the GM might rule at disadvantage. Special racial abilities should get them even better at it.